Owner of New England Compounding Center Convicted of Racketeering Leading to Nationwide Fungal Meningitis Outbreak

Outbreak was the largest public health crisis ever caused by a pharmaceutical product

Barry Cadden, the owner and head pharmacist of New England Compounding Center (NECC), was convicted today by a federal jury of racketeering and mail fraud in connection with the 2012 nationwide fungal meningitis outbreak, the Justice Department announced.

After a nine-week trial, the jury convicted Cadden, 50, of Wrentham, Massachusetts, of racketeering, racketeering conspiracy, mail fraud and introduction of misbranded drugs into interstate commerce with the intent to defraud and mislead. U.S. District Court Judge Richard G. Stearns scheduled sentencing for June 21, 2017.

In 2012, 753 patients in 20 states were diagnosed with a fungal infection after receiving injections of preservative-free methylprednisolone acetate (MPA) manufactured by NECC. Of those 753 patients, the U.S. Centers for Disease Control and Prevention (CDC) reported that 64 patients in nine states died. The outbreak was the largest public health crisis ever caused by a pharmaceutical product.

Specifically, Cadden directed and authorized the shipping of contaminated MPA to NECC customers nationwide. In addition, he authorized the shipping of drugs before test results confirming their sterility were returned, never notified customers of nonsterile results, and compounded drugs with expired ingredients. Furthermore, certain batches of drugs were manufactured, in part, by an unlicensed pharmacy technician at NECC. Cadden also repeatedly took steps to shield NECC’s operations from regulatory oversight by the FDA by claiming to be a pharmacy dispensing drugs pursuant to valid, patient-specific prescriptions. In fact, NECC routinely dispensed drugs in bulk without valid prescriptions. NECC even used fictional and celebrity names on fake prescriptions to dispense drugs such as “Michael Jackson,” “Freddie Mae” and “Diana Ross.”

Cadden faces a statutory maximum sentence of up to 20 years in prison on each of the mail fraud and racketeering counts. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting U.S. Attorney William D. Weinreb; Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division; Special Agent in Charge Jeffrey Ebersole of the U.S. Food and Drug Administration, Office of Criminal Investigations’ New York Field Office; Special Agent in Charge Harold H. Shaw of the FBI, Boston Field Division; Special Agent in Charge Leigh-Alistair Barzey of the Defense Criminal Investigative Service, U.S. Department of Defense, Office of Inspector General, Northeast Field Office; Special Agent in Charge Donna Neves of the Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; and Inspector in Charge Shelly Binkowski of the U.S. Postal Inspection Service, made the announcement today. Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of Weinreb’s Health Care Fraud Unit and Trial Attorney John W.M. Claud of the Justice Department’s Consumer Protection Branch are prosecuting the case.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Massachusetts, visit its website at https://www.justice.gov/usao-ma.